**Exhibit 10.09**

 

[CONFIDENTIAL TREATMENTREQUESTED] /*/ INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICHCONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEENFILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

 

**TERMS AND CONDITIONS**

 

**for**

**ENGINEERING, PROCUREMENT AND**

**CONSTRUCTION MANAGEMENT SERVICES**

 

**Between**

 

**ACUSPHERE, INC. (“ACUSPHERE”)**

 

**and**

 

**PARSONS COMMERCIAL TECHNOLOGY INC. (“PARSONS”)**

 

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TABLE OF CONTENTS

 
| ARTICLE I    | SCOPE OF SERVICES                         |                                         |
|-------------------|-------------------------------------------|----------------------------------------------|
|              | 1.1                                       | Description  of Services                     |   |
|              | 1.2                                       | Parsons Responsibilities                     |   |
|              | 1.2A                                      | Independent  Contractor                      |   |
|              | 1.3                                       | Owner’s  responsibilities               |   |
|              | 1.4                                       | Changes                                      |   |
|              |                                      |                                         |   |
| ARTICLE II   | COMPENSATION                              |                                         |
|              | 2.1                                       | Contract Price                               |   |
|              |                                      |                                         |   |
| ARTICLE III  | TERMS OF PAYMENT                          |                                         |
|              |                                      |                                         |   |
| ARTICLE IV   | WARRANTIES AND  GUARANTEES                |                                         |
|              | 4.1                                       | Engineering and  Design Warranty             |   |
|              | 4.2                                       | Construction  Warranty                       |   |
|              | 4.3                                       | Third Party Warranty  and Guarantee          |   |
|              | 4.4                                       | Limitations                                  |   |
|              |                                      |                                         |   |
| ARTICLE V    | INDEMNIFICATION                           |                                         |
|              | 5.1                                       | Bodily  Injury and Property damage Liability |   |
|              | 5.2                                       | Protection of the  Facilities                |   |
|              | 5.3                                       | Owner’s  Equipment                      |   |
|              | 5.4                                       | Limitations                                  |   |
|              |                                      |                                         |   |
| ARTICLE VI   | INSURANCE                                 |                                         |
|              |                                      |                                         |   |
| ARTICLE VII  | COMPLETION                                |                                         |
|              | 7.1                                       | Scheduled  Completion                        |   |
|              |                                      |                                         |   |
| ARTICLE VIII | TRANSFER AND  ACCEPTANCE                  |                                         |
|              | 8.1                                       | Care,  Custody and Control                   |   |
|              | 8.2                                       | Acceptance of the Services                   |   |
|              |                                      |                                         |   |
| ARTICLE IX   | TERMINATION, CANCELLATION  AND SUSPENSION |                                         |
|              | 9.1                                       | Termination by Owner  for Default            |   |
|              | 9.2                                       | Termination by  Parsons for Default          |   |
|              | 9.3                                       | Termination for Convenience                  |   |
|              | 9.4                                       | Suspension  by Owner                         |   |
|              | 9.5                                       | Rights  upon Termination                     |   |

 

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| ARTICLE X    | SAFETY  AND ENVIRONMENTAL                                      |                                     |
|-------------------|----------------------------------------------------------------|------------------------------------------|
|              | 10.1                                                           | Compliance  with Laws                    |   |
|              | 10.2                                                           | Pre-Existing  conditions                 |   |
|              |                                                           |                                     |   |
| ARTICLE XI   | FORCE  MAJEURE                                                 |                                     |
|              |                                                           |                                     |   |
| ARTICLE XII  | INTELLECTUAL PROPERTY                                          |                                     |
|              | 12.1                                                           | Title to Plans and  Specifications       |   |
|              | 12.2                                                           | Secrecy  Agreements                      |   |
|              | 12.3                                                           | Patents                                  |   |
|              |                                                           |                                     |   |
| ARTICLE XIII | DISPUTE  RESOLUTION (*NEGOTIATION, MEDIATION AND LITIGATION)*  |                                     |
|              | 13.1                                                           | General  Disputes                        |   |
|              | 13.2                                                           | Dispute  Resolution                      |   |
|              |                                                           |                                     |   |
| ARTICLE XIV  | GENERAL PROVISIONS                                             |                                     |
|              | 14.1                                                           | Independent  Contractor                  |   |
|              | 14.2                                                           | Subcontracts                             |   |
|              | 14.3                                                           | Assignment                               |   |
|              | 14.4                                                           | Audit and  Maintenance of Records        |   |
|              | 14.5                                                           | Avoidance  of Liens                      |   |
|              | 14.5A                                                          | Final Lien  Waiver and Release of Claims |   |
|              | 14.6                                                           | Surplus  Material                        |   |
|              | 14.7                                                           | Notices                                  |   |
|              | 14.8                                                           | Representations and  Remedies            |   |
|              | 14.9                                                           | Damages                                  |   |
|              | 14.10                                                          | Solicitation of Employment               |   |
|              | 14.11                                                          | Interpretation                           |   |
|              | 14.12                                                          | Entire  Agreement                        |   |
|              | 14.13                                                          | Security Interest  in Major Equipment    |   |
|              |                                                           |                                     |   |
| ARTICLE XV   | SPECIAL  CONDITIONS AND CORRESPONDENCE/ INVOICING INSTRUCTIONS |                                     |
|              |                                                           |                                     |
| ARTICLE XVI  | TAXES, DUTIES AND FEES                                         |                                     |
|              |                                                           |                                     |
| EXHIBIT 1         | Existing Contract Scope and  Related Compensation              |                                     |
| EXHIBIT 2         | Compensation and Payment                                       |                                     |
| EXHIBIT 3         | Equipment List                                                 |                                     |

 

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TERMS AND CONDITIONS FOR

ENGINEERING, PROCUREMENT AND

CONSTRUCTION MANAGEMENT SERVICES

 

THISAGREEMENT (“Agreement”) for the performance of services is made effective as ofthe 6th day of July 2004 between ACUSPHERE, INC., withprincipal offices at 500 Arsenal Street, Watertown, Massachusetts 02472 (“Owner”)and PARSONS COMMERCIAL TECHNOLOGY GROUP INC. (“PARSONS”), with principaloffices for this project located at 150 Federal Street, Boston, Massachusetts02110.

 

ThisAgreement establishes the terms and conditions for engineering, procurement andconstruction management services to be provided by Parsons and describes theresponsibilities of both Parsons and Owner. It is understood and agreed thatthese terms and conditions shall apply to existing work being performed byParsons for Owner, as described below, and that these terms and conditions maybe incorporated by reference into future agreements between Parsons and Ownerwhich agreements may be entered into as the scope of services for such servicesbecomes better defined.

 

INCONSIDERATION of the covenants hereinafter set forth, the parties heretomutually agree as follows:

 

ARTICLE I                                                                  SCOPEOF SERVICES

 

1.1           Description of Services

 

Parsons shall perform engineering, procurement andconstruction management services (hereinafter referred to as the “Services”)which may be contracted for in connection with Owner’s aseptic pharmaceuticalmanufacturing facility located at 890 East Street, Tewksbury, Massachusetts(the “Facilities”).  Such Services mayinclude those specifically set forth and described in the Basis of DesignReport prepared by Parsons, the first revision of which was dated August 20,2004 (the “BDR”) and as further defined and updated in the Proposal forEngineering, Procurement and Construction Manufacturing Management ServicesAI-700-301 Commercial Manufacturing Facility that was prepared by Parsons on September 3,2004, as amended (the Proposal).

 

It is understood that the proposal made by Parsons toOwner on September 8, 2004 represents a subset of the work under the September 3,2004 proposal. Nothing contained in the terms and conditions of this Agreementshall be construed to bind either party to any of the other work described inthe September 3, 2004 proposal or the September 8, 2004 proposal.Work is authorized only to the extent that it is separately agreed to by Ownerand Parsons.

 

It is understood that Owner leases said Facilities butthat Owner shall own the majority of equipment added to, and improvements madeto, the facility.

 

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1.2           Parsons Responsibilities

 

Asrequired for the Services contracted between the parties, Parsons shall (unlessotherwise provided herein) subject to the terms and provisions of thisagreement:

 

(a)   Furnishsupervisors, engineers, designers, draftsmen, and other personnel necessary forthe preparation of drawings and specifications;

 

(b)   Furnish buyers,inspectors, expediters, and other personnel necessary to procure specifiedequipment per the Proposal, as defined per Section 1.1, as Owner’spurchasing agent;

 

(c)   Furnishsupervisors, foremen, skilled and unskilled labor, and all other personnel;provided that, to the extent available, such personnel shall be individualswith Parsons experience;

 

(d)   Procure or supplymachinery, equipment, materials, expendable construction items and supplies,related services and contracts;

 

(e)   Prepare andfurnish a project schedule and cost estimate;

 

(f)    Obtain alllicenses required except for those specified to be obtained by Owner;

 

(g)   Supply the majorconstruction tools and equipment, and where not available, procure third partyconstruction tools and equipment, and supply small tools; and

 

(h)   Appoint anindividual who shall be authorized to act on behalf of Parsons and with whomOwner may consult at all reasonable times, and whose instructions, requests,and decisions will be binding upon Parsons as to all matters pertaining to thisAgreement and the performance of the parties hereunder. Parsons shall, uponexecution of the Agreement, advise Owner in writing of the name of theindividual referred to in the preceding sentence.

 

(i)    Comply, withrespect to applicable provisions specified and provided by Acusphere, with theOwner’s Commercial Building Lease dated the 20th of July 2004 betweenAcusphere, Inc. and 890 East LLC, of which Parsons has been separately provideda copy.

 

(j)    Assist Acusphereby providing required letter to Acusphere for notification to MassachusettsDevelopment Finance Agency (“MassDevelopment”), as reasonably requested byMassDevelopment or Owner, when Owner has spent at least two million dollarstowards the improvement of the facility in connection with the LeaseholdMortgage and Security Agreement dated 16th

 

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of August 2004between Acusphere, Inc. and MassDevelopment, of which Parsons has beenseparately provided a copy, and not to intentionally do anything which wouldcause Owner to not comply with its covenants under such agreement.

 

(k)   Install AI-700manufacturing process equipment as supplied by Owner.

 

(l)    Allow access tothe work areas for personnel of the Owner and its agents, contractor andsubcontractors coordinated with Parsons Construction Manager prior to jobsiteentry. All Owner personnel, agents, contractors and subcontractors shall berequired to follow all Parsons safety requirements and training. This willinclude such access as is needed to test, operate or maintain Owner’s AI-700manufacturing process equipment within the Facility while work by Parsons isongoing in or around the same work areas.

 

(m)  Except asnecessary, refrain from entering parts of the Facility which are not beingmodified as part of the Services such as the two-story office space section ofthe building.

 

(n)   Clean-up, at itsown cost or the cost of its contractors, any non pre-existing hazardous waste,hazardous materials, or pollutants generated at the facility or otherwiseintroduced by Parsons or its contractors.

 

1.2A        Independent Contractor

 

(a)   Parsons is andshall operate as an independent contractor in the performance of ConstructionManagement in regards to this Agreement and not as an agent or employee ofOwner, except with respect to the procurement, as Purchasing Agent of Owner, ofcertain specified equipment.

 

(b)   Other than to theextent Parsons shall place agency purchase orders for Owner, all Parsons’subcontracts, supply agreements, and lease and rental agreements entered intopursuant to this Agreement shall contain a provision expressly stating that nocontractual relationship exists between Owner and the Contractor, Supplier,person, or entity with which Parsons has entered into a purchasing orcontracting relationship. It is understood that that forms of such agreementswill be consistent with the Parsons’ forms titled “Construction SubcontractAgreement (LFI)”(Rev. L, July 1, 2003) or “ConstructionSubcontract Agreement (SFI)” (Rev. K, July 1, 2003) forconstruction services and that Parsons will not make any significantmodification to the terms of these contracts without notifying Owner in writingand obtaining the written approval of an authorized representative of Owner.

 

It isalso understood that Parsons has and uses different contract forms forconsulting services, professional and non-professional services, as well asother field services and that the obligations of the parties to such contractagreements are appropriate to the nature of services to be provided and 

 

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Parsonsshall use appropriate independent (non-agency) contract forms in place ofconstruction subcontract forms where appropriate provided that such forms donot make any warranties or representations on behalf of Owner which areinconsistent with the standard form LFI and SFI form examples that have beenprovided to Owner.

 

To theextent that Parsons places purchase orders with vendors, such purchase ordersshall only be placed with the express written approval of Owner and under formsapproved by Owner.

 

(c)   At all times,Parsons shall be solely responsible for the means, methods, sequences, andprocedures for the performance of its work under this Agreement.

 

(d)   Parsons shallaccept responsibility for its agents, contractors, subcontractors, suppliers,and all others it hires or engages to perform or assist in performing the work,whether on or off the project site.

 

1.3           Owner’s Responsibilities

 

Unlessotherwise provided herein, the Owner shall at such times as may be required byParsons for the successful and expeditious completion of the Services (the “Servicesof Owner”):

 

(a)   Provide a site forthe construction of the Facilities and suitable access thereto consistent witha site logistics plan to be prepared by Parsons and reviewed by Ownerencompassing the building and parking lot, provide a reasonably adequate areaor areas for Parsons and other Contractor’s offices, warehouses, craft changerooms, shop buildings, welding facilities, materials storage and lay down area,employee parking, and furnish necessary construction utilities.

 

(b)   Obtain any processand other licenses which are required for the Facilities, which arespecifically identified in the contract documents as being the responsibilityof Owner;

 

(c)   Take such stepsagreed to by Owner which are reasonably necessary and consistent with acommissioning plan to be mutually developed and agreed to by Owner and Parsonsto start up the Facilities, including the AI-700 manufacturing processequipment and maintenance thereof;

 

(d)   Pay all taxesassessed against the Facilities;

 

(e)   Advise of theexistence and, except as provided for in the Proposal, undertake the abatementand disposal of hazardous substances as defined in the ComprehensiveEnvironmental Response, Compensation and liability Act 

 

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whichare encountered but not created by Parsons in the performance of the Services;

 

(f)    Provide Parsonswith all drawings, specifications and other required data necessary for thecompletion of the Services for all Owner supplied equipment and Owner specifiedequipment and on which Parsons shall rely, other than those to be supplied byParsons as part of the Services;

 

Forpurposes of (f) above, it is understood that Owner supplied equipment consistsof AI-700 manufacturing process equipment as detailed on the equipment listattached hereto as Exhibit 3, as may be amended from time to time, andmade a part hereof. Owner is responsible for the delivery of Owner suppliedequipment to the Facilities where it will be installed by Parsons, includingthe mating of this equipment with facility systems, controls and utilities.Additional Owner specified equipment consists of the [CONFIDENTIAL TREATMENTREQUESTED] /*/. The installation of this equipment is currently not included inthe project. Parsons is responsible for the specifications for all otherequipment as detailed in Exhibit B referenced in Exhibit 3.  Should any additional equipment be requiredthat is not in Exhibit B, Owner and Parsons shall mutually agree in writing onthe responsibilities for designing, selecting, procuring, installing andcommissioning such equipment.

 

(g)   Appoint one ormore individuals who shall be authorized to act on behalf of Owner, with whomParsons may consult at all reasonable times, and whose instructions, requests,and decisions will be binding upon Owner as to all matters pertaining to thisAgreement and the performance of the parties hereunder. It is understood thatOwner may appoint a different individual to approve change orders and otheractions, if any, which involve changes in financial consideration than theindividual appointed by Owner to address matters such as design assumptions andproject oversight.  Owner shall adviseParsons in writing of the name(s) of the individual(s) referred to in thepreceding sentence. Unless otherwise stated by Owner in writing, the approvalof the Chief Financial Officer or Chief Executive Officer is required toapprove any change order or other action which potentially increases thefinancial commitment that Owner makes to Parsons or any vendor or contractorhereunder.

 

1.4           Changes

 

(a)   OWNER may,through its authorized representative, without invalidating this Agreement,order changes within the general Scope of Services required by this Agreement,by altering, adding to, or deducting from the Services to be performed bywritten order to Parsons (a “Change”). If any Change under this clause causesan increase or decrease in Parsons cost of, or the time required for, theperformance of any part of the Services, an equitable adjustment shall be madeby mutual agreement, and this Agreement shall be 

 

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modifiedaccordingly by issuance of a Change Order signed by the authorizedrepresentatives of the Parties. In no event shall Parsons be obligated to performa Change, nor shall Owner be obligated to pay any increased amounts, or agreeto extend the time of performance, prior to mutual acceptance and execution ofa written Change Order.

 

(b)   If the Ownerissues any instruction which, in Parsons reasonable opinion, will increase thetime for performance or the cost of performing any of the Services, Parsonsshall be entitled to submit promptly a Request for Change Order to the Owner,specifying the matters it believes entitle it to a Change Order.  The failure of Parsons to submit promptly(and in no event later than 10 days after such instruction or matter becomesknown) a Request for Change Order to the Owner shall constitute a waiver ofParsons’ right to submit a claim based on such instruction or matters.

 

(c)   If either partydisputes the existence, extent, validity or effect of a Change, then eitherparty may notify the other party that it desires to meet and resolve thedispute. If the dispute cannot be resolved to the mutual satisfaction of theparties within ten (10) business days, then either party can demand resolutionin accordance with Article XIII titled, “Dispute Resolution (Negotiation,Mediation and Litigation).”

 

ARTICLE II                                 COMPENSATION

 

2.1           Contract Price

 

Priorto entering into this Agreement, Parsons commenced work for Owner based on aseries of incremental agreements. Such work, and the estimated costs of suchwork, is described in Contract Work (Form 1) Authorization No. 1 and ContractWork (Form 2) Authorization No. 1 as dated concurrently herewith.  All work under such forms incorporate byreference the terms and conditions hereunder and such work, including the workdescribed in the prior agreements referenced by such forms, are subject tothese terms and conditions as these terms and conditions supercede the priorterms and conditions for such work. It is anticipated that the Owner andParsons may expand the contract scope through future Contract WorkAuthorizations and that such future Contract Work Authorizations will alsoincorporate the terms and conditions hereunder.

 

ARTICLE III          TERMSOF PAYMENT

 

To theextent that Owner and Parsons have in the past, or do in the future, enter intoContract Work Authorizations for work to be performed which agreementsincorporate the terms and conditions hereunder, the Owner shall make paymentsto Parsons in accordance with the terms of payment specified in Exhibit 2attached titled “Compensation and Payment.”

 

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ARTICLE IVWARRANTIES AND GUARANTEES

 

4.1           Engineering and Design Warranty

 

Parsonswarrants it will perform its engineering and design services (“EngineeringServices”) in accordance with the current standards of care and diligencenormally practiced by recognized engineering firms in performing services of asimilar nature. If during the one (1) year period following acceptance of theServices pursuant to section 8.2 it is shown that there is an error oromission in the Engineering Services as a result of Parsons failure to meetthose standards and Owner has notified Parsons in writing of any such errorwithin that period, Parsons shall reperform such Engineering Services withinthe original scope of Services as may be necessary to remedy such error. Allcosts incurred by Parsons in performing such corrective engineering and designservices shall be to the account of Parsons. It is understood and agreed that time is of the essence with respect tothe correction of any such error or omission.

 

Thecontents of 4.1 above do not remove or limit the Owner’s right to make a claimfor damages as otherwise provided in the terms and conditions of this document.

 

4.2           Construction Warranty

 

Parsonswarrants it will perform its construction management and other Services notdescribed in Section 4.1 hereinafter (“Construction Management Services”)in accordance with the current standards of care and diligence normallypracticed by recognized construction management firms in performing services ofa similar nature and that such Construction Management Services shall be freefrom material defects in workmanship. If during the one (1) year periodfollowing acceptance of the Services pursuant to Section 8.2 it is shownthat there is an error in the Construction Management Services as a result ofParsons failure to meet those standards and Owner has notified Parsons inwriting of any such error within that period, Parsons shall reperform suchConstruction Management Services within the original scope of Services as maybe necessary to remedy such error. All “incremental costs” incurred by Parsonsin performing such corrective services shall be reimbursable in accordance withExhibit 2 attached hereto, but no fee shall be paid on such correctiveservices.  It is understood and agreedthat time is of the essence with respect to any such corrective service.

 

Thecontents of 4.2 above do not remove or limit the Owner’s right to make a claimfor damages as otherwise provided in the terms and conditions of this document.

 

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4.3           Third Party Warranty and Guarantee

 

Parsonswill, for the protection of Owner, demand from all Vendors and Contractors fromwhich Parsons procures machinery, equipment or materials or services,warranties and guarantees with respect to such machinery, equipment, materialsor services, which shall be made available to Owner to the full extent of theterms thereof.  Parsons responsibilitywith respect to machinery, equipment and materials or services obtained fromVendors or Contractors shall be limited to rendering all reasonable assistanceto Owner for the purpose of enforcing the same. All costs incurred by Parsons in performing such Services shall bereimbursable in accordance with Exhibit 2 attached hereto, except that it isunderstood that with respect to costs incurred by subcontractors in connectionwith warranties and guarantees that Parsons will ensure that all such costs areborn by the subcontractors or otherwise not seek reimbursement from Owner forsuch costs.

 

4.4           Limitations

 

Parsonsshall have no warranty obligation or liability for defects in the Services tothe extent (a) the warranty claim is attributable primarily to Parsons relianceupon or use of data, design criteria, drawings, specifications or otherinformation furnished by Owner in connection with Owner supplied equipment orOwner specified equipment as described in Section 1.3, which may beamended from time to time, (b) Owner failed to properly operate and maintainthe Facilities, and (c) Owner fails to provide Parsons an opportunity topromptly make such tests and perform such remedial services as Parsonsreasonably deems appropriate.

 

ARTICLE V           INDEMNIFICATION

 

5.1           Bodily Injury and Property DamageLiability

 

Parsonswill indemnify, defend and hold Owner harmless from any and all claims,liabilities, and causes of action for bodily injury to or death of any person,or for damage to or destruction of property (excluding, however, the propertyreferred to in Section 5.2 and 5.3) to the extent resulting from thephysical acts or negligence of Parsons in the performance of the Services.

 

5.2           Protection of the Facilities

 

Exceptas otherwise provided in Section 5.1, Parsons will be responsible for andobligated to replace, repair, or reconstruct, and to furnish any material,equipment, or supplies furnished by Parsons which are lost, damaged, ordestroyed due to Parsons negligence or acts prior to transfer of care, custody,and control of the facilities or the affected portion thereof to Owner. Ownerassumes all responsibility for such loss, damage, or destruction after suchtransfer of care, custody, and control to Owner unless caused by Parsons actsor negligence.

 

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5.3           Owner’s Equipment

 

Asbetween Parsons and Owner, Owner assumes responsibility and risk for all lossof or damage to specified equipment purchased by Owner with respect to whichtitle has transferred to Owner, property owned by or in the custody of Owner,unless caused by Parsons or Parsons subcontractor’s negligence or willfulmisconduct, however such loss or damage shall occur, and agrees to maintainproperty damage insurance fully covering said property from such risk and,except in the event of negligence or willful misconduct on the part of Parsonsor one or more of Parsons’ subcontractors, does hereby and shall cause itsinsurers to waive rights of subrogation against Parsons and its vendors andsubcontractors of any tier under such insurance of Owner.

 

5.4           Limitations

 

Parsonsshall have no obligation to Owner with respect to any damage or loss toproperty caused by the perils of war, insurrection, revolution, nuclearreaction, or other like perils as may be excluded under the limits of theinsurance coverage provided pursuant to Article VI.  Parsons liability with respect to loss,damage or injury shall not exceed the limits of the insurance coverage calledfor pursuant to Article VI.

 

ARTICLE VI                             INSURANCE

 

Beforecommencing the Services, Parsons shall, at its own cost and expense, purchaseand maintain the following insurance:

 

•      Worker’sCompensation coverage as required by law.

 

•      Employer’sLiability with limits of $1,000,000 per occurrence.

 

•      GeneralLiability coverage for damages as a result of death or bodily injury(including personal injury) to any persons or destruction or damage to anyproperty with limits of $5,000,000 per occurrence.  Such coverage shall include, but not belimited to:

 

a)     ContractualLiability

 

b)    ProductsLiability including Completed Operations

 

c)     PremisesOperations

 

d)    Broad form Propertydamage (including X, C, U as applicable)

 

e)     Personal InjuryLiability

 

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•      AutomobileLiability Insurance as a result of death or bodily injury to any persons ordestruction or damage to any property arising out of the ownership, maintenanceor use of any motor vehicle with combined single limits of $1,000,000.

 

•      ExcessLiability insurance over the aforementioned coverage’s in the amount of$5,000,000.

 

•      ProfessionalLiability Insurance.  Parsons shall maintainProfessional Liability Insurance with limits of $5,000,000 per claim andgeneral aggregate for claims arising from the negligent performance ofprofessional Services under this Agreement.

 

Parsonsinsurance required herein shall be primary to any similar insurance carried byOwner.  The above insurance policies(excluding professional liability and worker’s compensation) shall includeOwner as an additional insured, but only to the extent of the named insured’snegligence.

 

Furthermore,Parsons will ensure that any and all Contractors managed by Parsons shall haveadequate insurance coverage for workers compensation, employers liability,general liability, automobile liability, excess liability and professionalliability consistent with the terms described above with the understanding thatsuch Contractors may have limits of $1,000,000 per occurrence for generalliability insurance and $1,000,000 per claim for professional liabilityinsurance and be considered to have reasonable insurance coverage provide thatthey have excess liability insurance of at least $5,000,000.

 

Allrequired coverage shall provide 30 days written notice of any material changeor cancellation.  Prior to commencementof any Services, Parsons shall furnish certificates of insurance evidencing theabove coverage.

 

Ownershall purchase and maintain property insurance upon the entire Project, whichproject amount excludes the cost of the building which is understood to beinsured by the landlord, for the full cost of replacement as of the time of anyloss. This insurance shall include as named insureds Owner and shall insureagainst loss from the perils of Fire, Extended Coverage, and shall include “AllRisk” insurance for physical loss or damage including, without duplication ofcoverage, at least theft, vandalism, malicious mischief, transit, collapse,flood, and earthquake. Owner and Parsons waive all rights against each other,the Subcontractors, and their Sub-Subcontractors for damages caused by perilscovered by insurance provided under this paragraph. Parsons shall requiresimilar waivers from all Subcontractors and their Sub-Subcontractors. Nothingin these waivers shall waive any party of their responsibilities with respectto damage caused by their respective acts or negligence.

 

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ARTICLE VII        COMPLETION

 

7.1           Scheduled Completion

 

Timeis of the essence.  Parsons shallcommence the Services as agreed after the date of this Agreement and shallprosecute the services on a best efforts basis continuously and with duediligence in accordance with the schedule provided in the September 3,2004 Proposal.

 

Assoon as the Facilities, or any part thereof, is in the opinion of Parsonsmechanically complete and ready for initial start-up operation, Parsons shallso notify the Owner by means of a Construction Completion Report. This reportshall state which parts of the Facilities Parsons proposes to demonstrate(meaning to prove or make evident by reasoning or adducing evidence) have beenmechanically completed in accordance with this Agreement and have passed suchtests as may have been required of Parsons under the Agreement. Parsons shallpropose a program for such demonstrations commencing within a reasonably prompttimeframe after the date of the notice. Mechanical Completion and the term “mechanicallycomplete” shall mean that all components of the Facilities have been properlyinstalled in accordance with applicable drawings and specifications, and theFacilities are demonstrated to be ready for reasonable initial startup

 

Theresponsibilities of Parsons and Owner in demonstrating the initial startup ofsuch Facilities, or parts thereof, shall be defined in a Commissioning Planwhich will be mutually agreed to by Parsons and Owner.

 

Uponthe reasonably satisfactory completion of such demonstration, Parsons and theOwner shall sign the Construction Completion Report, stating that Parsons hasdemonstrated to the Owner that the Project or part thereof is mechanicallycomplete and in a condition such that any procedures needed before theFacilities or part thereof is put into operation may safely be carried out.Such Construction Completion Report may include a reasonable punchlist of itemsrequiring completion before the Acceptance of the Services. MechanicalCompletion shall not be achieved if the punchlist includes substantial itemswhich would hinder the Owner from operating in the space or which would bedifficult to correct due to environmental or other requirements, such as canexist in connection with cleanrooms.

 

Mechanicalcompletion is further defined by the mechanical completion checklist. A draftof which checklist is included with Parsons September 3, 2004 Proposal asAttachment C.

 

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ARTICLE VIII       TRANSFERAND ACCEPTANCE

 

8.1           Care,Custody and Control

 

Mechanicalcompletion will be achieved on a system-by-system basis. Mechanical completionshall be deemed to have occurred upon the Owner’s signing of the ConstructionCompletion Report for that system, and the care, custody, and the control ofthe subject system or relevant part thereof shall pass to Owner. In any event,the care, custody, and control of the Facilities or part thereof shall pass toOwner no later than the time when Owner takes physical possession thereof. Fromand after the date of the transfer of the care, custody, and the control of theFacilities or part thereof, Owner shall assume all risks of physical loss ordamage thereto and shall, excluding damage caused by the acts of Parsons or itssubcontractors, and does hereby, release Parsons from and Owner will and shallcause its insurers to waive rights of subrogation against Parsons and itsVendors and Subcontractors of any tier for such loss or damage to the Facilitieswhich may thereafter occur, unless and to the extent that damage resultingwithin three years of such transfer of control can be shown to have resultedfrom the faulty workmanship or negligence of Parsons or its Vendors orSubcontractors.

 

8.2           Acceptance of the Services

 

WhenParsons deems it has completed all the Services, it shall so notify Owner inwriting. Within fifteen (15) days thereafter, Owner shall advise Parsons inwriting of any deficiencies or defects in the Services for which Parsons is responsibleunder this Agreement. As soon as any such deficiencies or defects arecorrected, Owner shall accept the Services in writing.  In the event Parsons and the Owner disagreeas to deficiencies or defects in the Services, the matter will be subject to disputeresolution under this Agreement.

 

ARTICLE IX                            TERMINATION,CANCELLATION AND SUSPENSION

 

9.1           Termination by Owner for Default

 

ShouldParsons become insolvent or bankrupt, or should Parsons commit a substantialbreach of a material provision of this Agreement, and should Parsons thereafterfail to commence actions in good faith to remedy such breach within ten (10)days after written demand by Owner or Parsons is unable to correct such breachwithin thirty (30) days, Owner may terminate this Agreement and enter upon thepremises and take possession thereof and at the same time instruct Parsons toremove from the premises all of its tools, equipment, and supplies, or Ownermay take possession of any and all of such tools, equipment, and supplies, for thepurpose of completing the Services. Upon any such termination, Parsons shall becompensated for all costs incurred and Services satisfactorily performed underany agreement that incorporates these terms, plus the earned portion of the Feeprovided for under any agreement that incorporates 

 

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theseterms, less Owner’s reasonable costs incurred to remedy such breach and removeParsons. In the event that Owner uses any of Parsons equipment or tools, Ownershall return the same to Parsons in good condition and repair, reasonable wearand tear excepted, and shall pay Parsons for the use thereof as providedhereunder or under any agreement that incorporates these terms.

 

9.2           Termination by Parsons for Default

 

ShouldOwner become insolvent or bankrupt or commit a substantial breach or default ofa material provision of this Agreement and (a) fails to remedy the same withinten (10) days after written notice thereof from Parsons if the breachconstitutes a failure to pay money, or (b) fails to commence actions to remedythe same within ten (10) days after written notice thereof from Parsons andthereafter to proceed diligently in remedying the same if the breach is otherthan to pay money, then Parsons may, at its option, suspend performance orterminate this Agreement. Should Parsons so suspend or terminate thisAgreement, it shall be paid for all reasonable costs incurred and Servicesperformed to the date of suspension/termination in accordance with the provisionsof Exhibit 2, including any reasonable cancellation charges by Vendors andSubcontractors, and the cost of all reasonable standby anddemobilization/remobilization expenses plus the earned portion of the Feeprovided for hereunder or under any agreement that incorporates these terms.

 

9.3           Termination for Convenience

 

Ownerreserves the right to terminate the Services for Owner’s convenience upon noless than thirty (30) days notice in writing to Parsons. Should the Services beso terminated by Owner, Parsons shall be paid for all costs incurred to date oftermination and through demobilization in accordance with the terms hereunderor under any agreement that incorporates these terms, including anycancellation charges by Vendors and Subcontractors, in accordance with theprovisions of Article II, and the earned portion of the Fee provided forin Exhibit 2.

 

9.4           Suspension by Owner

 

Ownerreserves the right to suspend the Services upon ten (10) days’ written noticeto Parsons, unless Parsons agrees in writing to a shorter notice period. Shouldthe Services be so suspended, Parsons shall be paid for all reasonable costsincurred in accordance with the terms hereunder or under any agreement thatincorporates these terms and Fee earned for Services performed to the date ofsuspension and through demobilization, including any reasonable suspension orcancellation charges by Vendors and Subcontractors. When a suspension equals orexceeds ninety (90) days in the aggregate, Parsons may elect to treat suchsuspension as a cancellation for Convenience of Owner pursuant to Section 9.3.

 

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9.5           Rights Upon Termination

 

Foravoidance of doubt, except in the event that Services are terminated under Section 9.2and Owner fails to compensate Parsons for all Services rendered in accordancewith Exhibit 2, Owner shall have the right to resume construction within thefacility at any time without Parsons provided, however, that such resumption ofconstruction without Parsons shall not limit Owner’s responsibilities forcompensating Parsons in full, in accordance with the terms specified in Exhibit2, for Services rendered through the date at which the Services were renderedby Parsons.  In such circumstances,Parsons agrees not to take any action which would prevent Owner from continuingconstruction.  If requested by Owner, inconjunction with such termination, Parsons agrees to assist Owner in itstransfer of the work hereunder to another construction management companyprovided that Owner agrees to pay Parsons for its time and expenses in a mannerwhich is consistent with Exhibit 2, excluding the 3% fee to Parsons on anysuch transfer-related work.  In suchcircumstances, Parsons agrees to use its commercial best efforts to assist insuch transfer.

 

ARTICLE X           SAFETY ANDENVIRONMENTAL

 

10.1         Compliance with Laws

 

(a)   Parsons shalldesign the Facilities so they comply with all applicable laws, including,without limitation, state and federal Occupational Safety and Health Acts (“OSHA”),and with applicable environmental laws, rules and regulations in force at theEffective Date of this Agreement.

 

(b)   Parsonsshall perform its Services in accordance with applicable laws, rules,regulations and orders relating to environmental concerns or safety and shallrequire each vendor, subcontractor and contractor to have an appropriate safetyprogram covering their employees;

 

(c)   From and aftertransfer of care, custody and control of the Facilities or part thereof, Ownerassumes responsibility for compliance by the Facilities or portion thereof withapplicable safety and environmental laws, rules and regulations and orders.

 

10.2         Pre-Existing Conditions

 

(a)   Owner warrants ithas disclosed or it shall immediately disclose as information becomes available(i) any and all reports, test results, public records and other sources ofinformation known to Owner which show areas of contamination at the site and(ii) all other information known by Owner relevant to the site.  Anything herein to the contrarynotwithstanding, title to, ownership of, and legal responsibility and liabilityfor any and all pre-existing and undisclosed contamination shall at all timesremain with Owner.  

 

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“Contamination”is any hazardous materials or toxic substance, pollutant or contaminant (as thesame may be defined under any applicable law) present at the job site, whichhas not been introduced to the site by Parsons or its subcontractors.

 

(b)   Owner shall, atOwner’s sole expense and risk, arrange for the handling, storage,transportation, treatment and delivery for disposal of pre-existing andundisclosed Contamination. Owner shall be solely responsible for obtaining adisposal site for such material. Owner shall look to the disposal facilityand/or transporter for any responsibility or liability arising from improperdisposal or transportation of such waste. Parsons shall not have or exert anycontrol over Owner in Owner’s obligations or responsibilities as a generator inthe storage, transportation, treatment or disposal of any hazardous materialsor contamination not created or caused by Parsons. Owner shall complete andexecute any required governmental forms relating to regulated activities of theOwner, including, but not limited to, generation, storage, handling, treatment,transportation, or disposal of pre-existing hazardous materials generated orhandled by Owner.  Owner shall defend,indemnify and save Parsons harmless from all damages, penalties, and othercosts and liabilities resulting from hazardous materials generated or handledby Owner.

 

ARTICLE XI                   FORCEMAJEURE

 

Anydelays in or failure of performance by Owner or Parsons, other than payment ofmoney, shall not constitute a default hereunder if and to the extent suchdelays or failures of performance are caused by occurrences beyond thereasonable control of Owner or Parsons, as the case may be, including but notlimited to: acts of God or the public enemy; expropriation or confiscation offacilities; act of war (declared or undeclared), hostilities or acts ofterrorism; rebellion or sabotage or damage resulting therefrom; riots orstrikes or other concerted acts of workmen, whether direct or indirect; or anycauses, whether or not of the same class or kind as those specially abovenamed, which are not within the control of Owner or Parsons respectively, andwhich by the exercise of reasonable diligence, Owner or Parsons , respectively,is unable to prevent (“Force Majeure”). Parsons Scheduled Completion Date shallbe adjusted in accordance with Changes Article 1.4 to account for anyForce Majeure delay and Parsons shall be reimbursed by Owner in accordance withExhibit 2 for all costs incurred in connection with or arising from a ForceMajeure event, including, but not limited to, those costs incurred in theexercise of reasonable diligence to avoid or mitigate a Force Majeure event.

 

Parsonsshall notify Owner within 10 days of a Force Majeure occurrence or as soonthereafter as practical.

 

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ARTICLE XII                  INTELLECTUALPROPERTY

 

12.1         Title to Plans and Specifications

 

Drawingsand specifications prepared by Parsons or others pursuant to this Agreement(hereinafter “Documentation”) shall be the property of Owner. . In the eventOwner uses such information for any future projects, Owner shall defend,indemnify and hold Parsons harmless from and against any costs (includingattorney’s fees and costs of suit) and liabilities arising out of claims orsuits asserted against Parsons even if such claims or suits are based onallegations of negligence of Parsons. Parsons agrees that at the completion ofits services hereunder, or at any time upon the request of Owner, that it willprovide Owner with a complete set of all existing design and engineering plansand drawings related to the project.

 

12.2         Secrecy Agreements

 

Anywritten agreements between Parsons and Owner entered into prior to theeffective date hereof relating to secrecy or confidentiality of informationexchanged between Parsons and Owner shall be deemed incorporated herein byreference as if fully set forth in this Agreement.

 

12.3         Patents

 

Parsonsagrees to include, as a term or condition of each purchase order for equipmentissued by it in the performance of the Services, a patent indemnificationprovision extending from the vendor under such purchase order to owner andParsons and to render such assistance to Owner as may be reasonably required ona reimbursable cost basis to enforce the terms of such indemnification byvendors.

 

ARTICLE XIII                DISPUTE RESOLUTION- (*NEGOTIATION,MEDIATION AND LITIGATION)*

 

13.1         General Disputes

 

In theevent of a dispute between the parties, arising under or relating to thisAgreement which cannot be amicably resolved the following shall apply:

 

13.2         Dispute Resolution

 

(a)   Claims, disputesor other matters in question between parties to this Agreement arising out ofor relating to Agreement or breach thereof shall be subject to and decided bynegotiation prior to mediation, followed by litigation only if necessary toresolve the matter.  Such mediation shallbe conducted in accordance with Construction Industry Mediation Procedures ofthe American 

 

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ArbitrationAssociation, or other mutually-agreeable alternative dispute resolutionprovider.

 

(b)   Prior tolitigation, the parties shall endeavor to settle disputes by mediation.  Demand for mediation shall be filed inwriting with the other party to this Agreement within a reasonable time afterclaim, dispute, or other matters in question have arisen.  In no event shall the demand for mediation bemade after the date when institution of legal or equitable proceedings based onsuch claim, dispute or other matter in question would be barred by theapplicable statutes or repose or limitations.

 

ARTICLE XIV                GENERALPROVISIONS

 

14.1         Independent Contractor

 

Parsonsshall perform the Services as an independent contractor, except that contractsor purchase orders for equipment mutually-specified by Owner and Parsons may beissued by Parsons as purchasing agent for Owner.

 

As aPurchasing agent of Owner with respect to purchases of mutually-specifiedequipment, Parsons will not make any representations which are not consistentwith those defined in the Procurement Procedures Manual established between theOwner and Parsons.  In addition, Parsonswill not place any orders for materials or equipment on Owners’ behalf, or makeany other commitments on the Owners’ behalf, without the express written approvalof an authorized representative of the Owner with respect to the placement ofsuch order or the making of such commitment. Parsons agrees to maintaincomplete records of all such orders and commitments and to make such recordsavailable to Owner upon request.

 

14.2         Subcontracts

 

Parsonsmay subcontract any portion of its Services to a Subcontractor, subject toapproval by Owner, which approval shall not be unreasonably withheld. Except asotherwise provided in this Agreement, in no case shall Owner’s approval of anysubcontract relieve Parsons of any of its obligations under this Agreement.Notwithstanding the above, Parsons may have portions of the Services performedby its affiliated entities or their employees, in which event Parsons shall beresponsible for such Services and Owner will look solely to Parsons as if theServices were performed by Parsons.

 

14.3         Assignment

 

ThisAgreement shall not be assignable by either party without the prior writtenconsent of the other party hereto, except that it may be assigned without suchconsent to the successor of either party, or to a person, firm, or corporation 

 

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acquiringall or substantially all of the business assets of such party or to a whollyowned subsidiary of either party, but such assignment shall not relieve theassigning party of any of its obligations under this Agreement.  Any attempted assignment without such consentshall be null and void.  No assignment ofthis Agreement shall be valid until this Agreement shall have been assumed bythe assignee. When duly assigned in accordance with the foregoing, thisAgreement shall be binding upon and shall inure to the benefit of the assignee.

 

14.4         Audit and Maintenance of Records

 

Parsons’work hereunder shall be done on an “open book” basis.  As such, Parsons will periodically, and anytime upon Owners’ request, provide Owner with a summary of all actual costsincurred, all costs committed, all disputes and other matters associated withactual or potential costs hereunder.

 

Ownershall have the right to audit and inspect Parsons records and accounts coveringcosts hereunder at all reasonable times during the course of the Services andfor a period of one (1) year after the acceptance thereof pursuant to Section 8.2provided, however, the purpose of any such audit shall be only for verificationof such costs and that Parsons shall not be required to keep records of orprovide access to those of its costs covered by Fee, allowances, fixed rates,or of costs which are expressed in terms of percentages of other costs.

 

To theextent that Parsons has an audit or review performed of its actual costs orestimated costs hereunder by any third-party consultant, accountant, governmententity or other party, Parsons will share the results of such audit or reviewwith Owner.

 

14.5         Avoidance of Liens

 

Uponreceipt of payment from Acusphere, Parsons shall at all times promptly pay forall services, labor, equipment, and supplies used or furnished by Parsons orany contractor, subcontractor, materialmen, or suppliers under this Agreementand, to the fullest extent permitted by applicable law, shall keep the propertyand project site and all property belonging to Owner and its Landlord free andclear of any and all liens and rights of lien arising out of services, labor,or goods furnished by Parsons or its employees, contractors, subcontractors, orsuppliers, in the performance of the work. Parsons shall immediately comply with Owner’s request for partial lienwaivers from contractors, subcontractors, and suppliers in format permitted bylaw and acceptable to Owners.  If Parsonsfails to release and discharge any such lien or claim of lien that Parsons haspreviously been paid by Acusphere for against the project site or the propertyof Owner or its Landlord arising out of performance of the work within seven(7) working days after receipt of written notice from Owner to remove such lienor claim of lien, Owner may, at its option, discharge or release the lien orclaim of lien or otherwise deal with the lien claimant, and Parsons shall payOwner any 

 

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reasonablecosts and expenses incurred by Owner in so doing, including reasonableattorneys’ fees and court costs so incurred.

 

14.5A      Final Lien Waiver and Release of Claims

 

Ownershall not be obligated to make final payment to Parsons until Parsons hasdelivered to Owner a Final Lien Waiver and Release of Claims satisfactory toOwner certifying:  (a) that Parsonshas fully performed under this Agreement and that all claims of Parsons for theWork are satisfied upon the making of such final payment; (b) that noproperty of Owner or other property used in connection with the Agreement issubject to any unsatisfied lien or claim as a result of the performance of theAgreement; (c) that all rights of lien against Owner’s property inconnection with the Agreement are released (including, without limitation, ifOwner requests, final releases of lien satisfactory in form to Owner andexecuted by all persons who by reason of furnishing services, labor, or other,for the Work are potential lienors against Owner’s property); and d) thatParsons will have paid in full all outstanding obligations against the workpromptly upon receipt of final payment.

 

14.6         Surplus Material

 

Parsonsshall use reasonable care to limit the amount of surplus materials procured forthe Facilities. It is understood, however, that in performing work of the scopeand complexity of the Services, it is necessary and inevitable that certainsurplus materials be purchased. The purchase price and transportation costs ofsuch surplus materials shall be considered costs of the Services to the sameextent as any materials actually incorporated into the Facilities. Parsonsshall, as soon as it is feasible to do so, determine and advise Owner whatmaterials are surplus materials and thereafter shall dispose of such materialsas directed by Owner, and the cost of the Services shall be for the Owner’saccount and paid to Parsons with Fee.

 

14.7         Notices

 

Allnotices pertaining to this Agreement shall be in writing and, if to Owner,shall be sufficient when sent registered or certified mail or telecopied (withoral confirmation) to Owner at the following address:

 

Acusphere,Inc.

Attn:Chief Financial Officer

500Arsenal Street

Watertown,MA 02472

Tel:617-648-8800

Fax:617-926-3605

 

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Allnotices to Parsons shall be sufficient when sent registered or certified mailor telecopied (with oral confirmation) to Parsons to the following address:

 

GaryMcKiernan

ParsonsCommercial Technology Group Inc.

150Federal Street

Boston,MA 02110-1713

Tel:617-449-1280

Tel:617-449-9777

 

14.8         Representations and Remedies

 

Parsonsmakes no representations, covenants, warranties, or guarantees, express orimplied, other than those expressly set forth herein. The parties’ rights,liabilities, responsibilities and remedies with respect to the Services shallbe exclusively those expressly set forth in this Agreement.

 

14.9         Damages

 

(a)   Neither partyshall be responsible or held liable to the other for consequential, incidental,special or indirect damages, including without limitation, liability for lossof use of the facilities or Owner’s existing property, loss of profits,interest, product or business interruption, increased costs of operations andmaintenance or staffing needs, however the same may be caused.

 

(b)   Owner herebyreleases, indemnifies and agrees to hold Parsons harmless from any liabilityarising from the ownership, use or operation of the facilities, or any partthereof, subsequent to the transfer of care, custody and control as provided inArticle VIII to Owner, except only as provided in Articles IV and V.

 

(c)   If Owner is notthe sole owner of the Facilities or existing property at or adjacent to thejobsite, or if the Facilities are to be owned or operated by a person or entityother than Owner, Owner shall obtain waivers and/or releases from the otherowners or operators thereof sufficient to provide to Parsons the sameprotection from liability for loss or damage that would be afforded to Parsonsunder this Agreement as if the Owner were the sole owner or operator. As analternative, Owner shall protect and indemnify Parsons from any and allliability to the facility Owner’s and operators to the same extent affordedParsons by the Owner herein.

 

(d)   It is understoodand agreed that Parsons, acting on behalf of Owner, and after securing approvalof costs per bid tabs provided by Parsons to Owner, may place Purchase Ordersas Agent and Contracts, Subcontracts, Service Agreements, Rental Agreementsand/or Lease Agreements as Construction Manager in conjunction with workrequired herein. It is also understood that from time to time Vendors,Suppliers, Contractors, Subcontractors, Service 

 

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Providers,Rental Companies and/or Leasing Companies may become involved in disputes withParsons as a result of goods being furnished or services being provided.

 

In theevent any such dispute arises causing Parsons to incur any negotiation,mediation, arbitration and/or legal expenses in conjunction with such dispute,the following shall apply:

 

a)    Situations where Parsons is pursuing a vendor or subcontractor: Provided that the costs are reasonable and provided that Acusphere approvessuch pursuit in advance and can elect to discontinue such pursuit via Parsonsat any time, Acusphere will pay Parsons their costs incurred in such pursuit.

 

b)    Situations where Parsons is pursued by a vendor or subcontractor:

 

i)              IfAcusphere and Parsons agree that their was no negligence or willful misconductor obvious mismanagement on the part of Parsons and if Acusphere and Parsonsagree that the dispute relates solely to the project for which Parsons isworking with Acusphere (as opposed to some feud that carries over from anotherjob), Acusphere will pay Parsons reasonable costs, including costs incurred byParsons for negotiation, mediation, arbitration, legal services and judgmentsawarded to other parties, provided that Acusphere has complete control over theright to settle the dispute with the vendor or subcontractor and provided thatAcusphere has the right to take over the defense of such matter if Acusphere soelects.

 

ii)             IfAcusphere and Parsons agree that the dispute results from prior experiencebetween Parsons and the vendor or subcontractor or results from Parsons’negligence or willful misconduct or mismanagement, Parsons will be responsiblefor all such costs.

 

iii)            IfAcusphere and Parsons cannot agree on who is responsible, Acusphere and Parsonswill seek a mediator to determine whether the circumstances dictate that (i) or(ii) is the right course or whether such costs should be shared by Acusphereand Parsons.

 

It isunderstood that Owners’ agreement to reimburse Parsons for costs in certaincircumstances relating to disputes is an agreement between Owner and Parsonsonly and that Parsons will not make any representation to any subcontractor thatOwner will reimburse such costs for subcontractors unless Parsons isspecifically authorized to do so in writing by Acusphere.

 

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14.10       Solicitation of Employment

 

Neitherparty shall, whether during the term of this Agreement or for a period of 180days thereafter, directly or indirectly for itself or on behalf of, or inconjunction with, any other person, partnership, corporation, business ororganization, solicit, hire, contract with or engage the employment of anemployee of the other with whom that party or its personnel have had contact inthe course of providing Services under this Agreement, unless that party hasobtained written consent of the other to such hiring. Nothing in this provisionshall prevent Owner from separately contracting with any vendor orsubcontractor utilized by Parsons or from hiring any employee of such any suchvendor or subcontractor.

 

14.11       Interpretation

 

(a)   This Agreementshall be governed by and interpreted in accordance with the laws of theCommonwealth of Massachusetts, excluding provisions thereof, which refer to thelaws of another jurisdiction.

 

(b)   Headings andtitles of articles, Sections, paragraphs and other subparts of this Agreementare for the convenience of reference only and shall not be considered ininterpreting the text of this Agreement. Modifications or amendments to thisAgreement must be in writing and executed by a duly authorized representativeof each party.

 

(c)   Indemnitiesagainst, releases from, assumptions of and limitations on liability expressedin this Agreement, as well as waivers of subrogation rights, shall apply evenin the event of the fault, negligence or strict liability of the partyindemnified or released or whose liability is limited or assumed or againstwhom rights of subrogation are waived and shall extend to the officers,directors, employees, licensors, agents, partners and related entities of suchparty and its partners and related entities.

 

(d)   The parties agreeto look solely to each other with respect to the obligations and liabilityarising in connection with this Agreement and Services performed hereunder.This Agreement and each and every provision hereof are for the exclusivebenefit of Owner and Parsons and not for the benefit of any third party, exceptto the extent such benefits have been expressly extended pursuant to Section 14.11(c).

 

(e)   In the event thatany portion or all of this Agreement is held to be void or unenforceable, theparties agree to negotiate in good faith to amend the commercial and otherterms of this Agreement in order to effect the intent of the parties as setforth in this Agreement.

 

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(f)    The provisions ofthis Agreement which by their nature are intended to survive the termination,cancellation, completion, or expiration of the Agreement, including but notlimited to any indemnity obligations or expressed limitations of or releasesfrom liability, shall continue as valid and enforceable obligations of theparties notwithstanding any such termination, cancellation, completion orexpiration.

 

14.12       Entire Agreement

 

(a)   This Agreementconsists of this contract document, documents expressly incorporated herein andthe following attached exhibits:

 

Exhibit1:  Existing Contract Scope and RelatedCompensation;

Exhibit2:  Compensation and Payment; and

Exhibit 3:  Equipment List.

Documentsreferenced in this Agreement, subarticle 1.1 “Description of Services”

 

It isanticipated that the Owner and Parsons will expand the contract scope throughfuture Contract Work Authorization Forms and that such future Contract WorkAuthorization Forms will incorporate the terms and conditions hereunder.

 

(b)   This Agreement, asdefined in this Section, sets forth the full and complete understanding of theparties as of the date first above stated, and it supersedes any and allagreements and representations made or dated prior thereto. In the event of anyconflict between this contract document and any of the Exhibits hereto, theterms and provisions of this contract document shall control. In the event ofany conflict among the Exhibits, the Exhibit of the latest date shall control.

 

(c)   THE PARTIESACKNOWLEDGE AND AGREE THE TERMS AND CONDITIONS OF THIS AGREEMENT HAVE BEENFREELY, FAIRLY AND THOROUGHLY NEGOTIATED. FURTHER, THE PARTIES ACKNOWLEDGE ANDAGREE SUCH TERMS AND CONDITIONS, INCLUDING BUT NOT LIMITED TO THOSE RELATING TOWAIVERS, ALLOCATIONS OF, RELEASES FROM, INDEMNITES AGAINST AND LIMITATIONS OFLIABILITY, WHICH MAY REQUIRE CONSPICUOUS IDENTIFICATION, HAVE NOT BEEN SOIDENTIFIED BY MUTUAL AGREEMENT AND THE PARTIES HAVE ACTUAL KNOWLEDGE OF THEINTENT AND EFFECT OF SUCH TERMS AND CONDITIONS. EACH PARTY ACKNOWLEDGES THAT INEXECUTING THIS AGREEMENT IT RELIED SOLELY ON ITS OWN JUDGEMENT, BELIEF, ANDKNOWLEDGE, AND SUCH ADVICE AS IT MAY HAVE RECEIVED FROM ITS OWN COUNSEL, AND ITHAS NOT BEEN INFLUENCED BY ANY REPRESENTATION OR STATEMENTS MADE BY ANY OTHERPARTY OR SUCH OTHER PARTY’S COUNSEL. 

 

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NOPROVISION IN THIS AGREEMENT IS TO BE INTERPRETED FOR OR AGAINST ANY PARTYBECAUSE THAT PARTY OR ITS COUNSEL DRAFTED SUCH PROVISION.

 

14.13       Security Interest in Major Equipment

 

Ifprogress payments or deposits are made for equipment, Owner shall have andshall be entitled to perfect a first priority security interest in suchequipment to the extent of such payments made.

 

Theparties shall cooperate to cause the execution of such documents as may benecessary to effectuate such security interest.

 

ARTICLE XV                  SPECIAL CONDITIONS AND CORRESPONDENCE/INVOICINGINSTRUCTIONS:

 

SeeExhibit 2 for invoicing instructions.

 

ARTICLE XVI                TAXES,DUTIES AND FEES

 

Parsonsshall pay when due, and the pricing set forth in this Agreement shall beinclusive of, all taxes, duties, fees and other assessments of whatever natureimposed by governmental authorities and applicable to the performance ofParsons Work and this Agreement.

 

IN WITNESS WHEREOF, theparties hereto have executed this contract, document as of the date and yearfirst above written.

 
| OWNER  ACUSPHERE, INC.   |   | PARSONS COMMERCIAL TECHNOLOGY   GROUP INC. (“PARSONS”) |
|--------------------------|--------|------------------------------------------------------------------|
|                     |   |                                                             |
| /s/ Sherri C. Oberg      |   |                                                             | /s/ Daniel Mariani |   |
|                     |   |                                                             |   |   |
| By: Sherri C. Oberg      |   |                                                             | By: Daniel Mariani |   |
|                     |   |                                                             |   |   |
|                     |   |                                                             |   |   |
| Title: President and CEO |   |                                                             | Title: Sr. V.P. |   |

 

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**EXHIBIT 1**

 

EXISTING CONTRACT SCOPE AND RELATED COMPENSATION

 

 

As the design work beingperformed by Parsons advances, it is anticipated that the Owner and Parsonswill enter into agreements which expand the contract scope in accordance withsubarticle 1.1 “Description of Services”, and that such future ContractWork Authorizations will incorporate the terms and conditions hereunder. As ofthe date of this Agreement, the Owner and Parsons have agreed to the scope ofwork and amount of compensation defined in the Contract Work Authorization(Form 1) for Engineering and Construction Management Services #1 and theContract Work Authorization (Form 2) for Agency Procurements #2.

 

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**EXHIBIT 2**

 

COMPENSATION AND PAYMENT

 

Engineering andDesign

 

All effort-hoursnecessary for the project management, architectural, engineering, procurement,and project controls portion of this project will be billed on a reimbursablebasis at a multiplier of 2.1 times base salary.

 

Such hours shall excludecosts incurred for negotiating and documenting contract terms between Parsonsand Owner as such costs shall be borne by the respective parties.

 

All home office expensesand local travel costs will be billed at a rate of $5 per effort-hour.

 

Service costs for civilengineering, survey work, permit assistance, site investigations, and any otheroutside engineering services performed by other than Parsons personnel underthe supervision of Parsons shall be invoiced to Owner at cost plus 10%.  Travel beyond the local area, defined asTewksbury, Boston, and Watertown, Massachusetts will be invoiced at out-of-pocketcost plus 5%.

 

ConstructionManagement

 

All effort-hours for thefield-based construction management staff will be billed on a reimbursablebasis at a multiplier of 1.8 times base salary.

 

Project FeeInvoices

 

Parsons will invoiceOwner on a monthly basis starting in November 2004 for the project fee ata rate of 3% for all amounts due to be paid under each purchase order placed asAgent, each general conditions order and subcontract and each constructionsubcontract issued.  No Project Fee shallbe paid on design services performed by Parsons.

 

It is also understoodthat consistent with the Owner reimbursing Parsons for the cost of generalconditions orders and subcontracts and each construction subcontract issuedplus the 3% fee thereon, Owner shall also reimburse Parsons for secondedservices of any seconded services provider engaged by Parsons, plus a 3% feethereon as if the provider is a subcontractor to Parsons provided that suchseconded services are for services within the scope of Parsons’responsibilities on this project and provided that Owner shall only pay onesuch 3% fee for such services. Retainage shall not apply to payments due theseconded services provider. Except for potential seconded services to bepotentially provided to Parsons’ by The Richmond Group, Parsons will seekadvance approval from Owner before incurring seconded services costs on thisproject.

 

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Invoicing andPayment Terms

 

Parsons will issueadvance payment invoices to Owner on a monthly basis at the beginning of themonth in accordance with the cash requirements necessary to meet paymentobligations to vendors, suppliers, and subcontractors working for Parsons forthe upcoming month, plus the amount due in accordance with the project servicespayment schedule and the monthly project fee amount.  Such advance payment invoices shall notinclude any amounts for release of retainage or clearing of punchlist itemswhich amounts shall only be paid by Owner to Parsons after release orcompletion, respectively and shall not include any prepayments to Agencyvendors.  Any overpayment or underpaymentto Parsons based upon this advance payment method shall be offset against oradded to the payment schedule for the subsequent month.  To the extent, if any, that Owner agrees toprovide subcontractors or Parsons with financial incentives to achievespecified milestones, such incentives will be paid based upon achievement andnot included in the advance payment invoices.

 

Owner shall pay vendorsdirectly for equipment purchases placed by Parsons as agent of Owner.

 

Parsons will also issuereconciled actual cost statements on a monthly basis for the previous month andapply either a debit or credit to the following month.

 

Payment terms for alltypes of invoices are net 14 days, payable via wire transfer to a bank accountidentified in writing to Owner by Parsons.

 

Parsons shall forwardcopies of its invoices, together with the reconciled actual cost statements andits estimate of cash requirements to meet payments to subcontractors to:

 

Acusphere,Inc.

Attn:       AccountsPayable

500Arsenal Street

Watertown,MA 02472

 

To ensure promptattention to such invoices, it is understood that the reconciliation of actualcosts and the estimate of cash requirements shall first be sent to, and discussedwith, Acusphere’s Vice President of Manufacturing or such person as isdesignated by Acusphere’s Vice President of Manufacturing for such review.

 

Parsons will promptlymake payments to subcontractors when due. Parsons will not credit its ownaccounts for any advance payment amount paid by Owner that was intended forpayment to subcontractors.

 

If this Agreement isterminated and Owner has advanced payments to Parsons which exceed the amountearned by Parsons and its subcontractors, Parsons shall within fourteen (14)days for such termination refund Owner in full for such overpayment.

 

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Retainage

 

A 10% retainage will bewithheld from each construction subcontract invoice. The retainage will not beconsidered earned or released to subcontract until the completion of thesubcontractor’ work.

 

Guaranteed MaximumPrice (GMP)

 

If and when the partiesagree that all or part of the services covered by the terms and conditions forEngineering, Procurement and Construction Management Services are sufficientlydefined to allow Parsons to perform all or part of it’s services on a GMPbasis, and if the Owner requests a GMP for all or part of the sufficientlydefined services, the parties agree to enter into negotiations for the purposeof establishing a GMP for such portion or portions of the work the partiesagree are sufficiently definable.

 

A Guaranteed MaximumPrice is defined as follows:

 

“GuaranteedMaximum Price: Sum established in an Agreement between Owner and parsons as themaximum compensation to be paid by the Owner to Parsons for performingspecified Work on the basis of cost of labor and materials plus overheadexpenses and profit.”

 

Target Price, Costof the Work (Target Price)

 

If agreed to by Owner andParsons, the Contract Work Authorizations entered into by Owner and Parsonsshall be based on a target price. Under a target price arrangement, the targetprice is based on the cost of the work which includes Parsons’ engineering anddesign services and markups thereon, all Parsons’ home office expenses andtravel costs, invoiced at a $5 effort hour rate, service costs and markups,construction subcontracts, construction management and markups thereon, Parsons’project fees, and the costs of procurements made by Parsons as agent for Ownerwhich are further described in the Exhibit 2.

 

Collectively, the costsof the work as defined herein shall be the only cost basis for determining thetarget price regardless of any other project costs.

 

Exclusions fromTarget Price

 

The target price finalcalculations shall exclude the following costs, unless modified by subsequentchange order:

 

•              Commissioningservices to the extent that they are not included in the September 3, 2004proposal.

•              Warrantyenforcement and assistance costs.

 

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•              Workby other than Parsons, or vendors of subcontractors of Parsons, listed on theResponsibility Matrix (Attachment B) in Parsons’ September 3, 2004proposal.

•              Anyand all costs, of every type and nature not identified in the “target pricecost of the work” described above this list of exclusions.

 

Purpose for TargetPrice

 

The target price has beenestablished for the purpose of estimating the cost of the project and as amanagement tool for identifying cost variances. THE TARGET PRICE SHALL NOT BE CONSIDERED A GUARANTEED MAXIMUM PRICE.

 

Shared Savings 

 

Owner and Parsons mayagree to a shared savings program. Unless specifically agreed to by Owner andParsons as part of a Contract Work Authorization, it is understood that SharedSavings is not in effect.  To the extentthat the shared saving is in effect for a target price or GMP contract workauthorization and to the extent that actual costs incurred are less than thestipulated target price or, if applicable, the GMP, Parsons and the Owner shallshare the savings on a 50/50 basis.  Thetarget price shall be calculated based on the cost of the work as describedabove and the Owner shall pay Parsons 50 cents for every dollar that the targetprice is under run, with the following exclusions. Shared savings shall notapply to equipment purchases made by Parsons as agent for Owner as described inContract Work Authorization Form 2 nor shall shared savings apply to designservices, procurement services or other work provided directly by Parsons. Suchshared savings, when and if applicable, shall only apply to the Parsonsconstruction subcontract cost savings portion of the savings.

 

Payment of SharedSavings

 

If and when sharedsavings is in effect, within 60 days after acceptance of the project by Owner,Parsons shall present Owner with a report detailing the final projectcost.  Owner shall review the final costreport promptly and the parties shall negotiate in good faith to resolve anydisputed items related thereto. Acceptance of the project is based on the provisions of Article VIIIper above.

 

Following resolution ofany cost disputes Owner shall make payment to Parsons of the earned sharedsavings within 15 days thereafter.

 

Owner shall notunreasonably withhold any portion of the share savings due Parsons which is notin dispute.

 

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Adjustments toTarget Price

 

The Owner or Parsonsshall have a right to negotiate a reasonable adjustment to the target price inconjunction with any Contract Work Authorization release which involves asignificant change in scope and the Owner and Parsons shall be entitled to seeka resolution if a dispute arises, concerning the amount of the adjustment consideredreasonable, in accordance with the Dispute Resolution article contained inthe agreement.  In assessing whether ornot an adjustment is reasonable, it is recognized that Owner and Parsons havecollaborated on this project, the scope of work is has been studied by bothparties and the construction is being performed based upon Parsons’ design. Tothe extent that design inputs or output requirements have been modified andsuch modification results in a modification of the scope of work, a changeorder may be applicable. However, unanticipated complications in constructionthat arise, when not due to changes in design input or output requirements andnot due to latent problems under the soil and/or unknown hazardous wasteissues, are not intended to result in adjustment to the target price.

 

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**EXHIBIT 3**

**EQUIPMENT LIST**

 

See equipment list,marked “Exhibit B” and dated October 15, 2004 which is attached hereto andmade a part hereof.

 

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Exhibit B

 

As of October 15, 2004

Equipment List

AI-700 CommercialManufacturing Facility – Phase 1A

 

[CONFIDENTIAL TREATMENT REQUESTED] /*/

 

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